Shutdown hits 17 counties with Sh18bn daily GDP

The city centre was deserted, with businesses shut and a heavy police presence on the streets as the economy is estimated to have lost billions of shillings. At stake in the dramatic shutdown of the capital was economic output valued at Sh8.8 billion, representing more than two million people who work in the city, based on official statistics.

But the Nairobi Securities Exchange (NSE) posted a gain of Sh18.2 billion on a day when the number of shares traded dropped to 13.3 million stocks from 18.2 million on Friday, reflecting a 26.9 percent drop.

Monday marked the third day of protests in three weeks, driven by grievances including police brutality, rising cost of living, corruption, and wastage of public resources.

Nairobi, which accounts for 30.1 percent of Kenya’s GDP, bore the brunt of the barricades.

Its contribution to Kenya’s economy in 2023 was Sh2.87 trillion, translating to daily production of goods and services worth Sh7.8 billion, official data shows.

Analysts expect the daily wealth from the city to have grown to Sh8.8 billion this year.

Police had earlier blocked major roads leading into Nairobi, and they heavily restricted vehicle traffic within the city, leaving streets deserted but for the demonstrators who turned out on foot.

Most schools, shopping malls, factories and offices were shut in anticipation of possible trouble.

There were other demonstrations around the country, including 16 other counties — Nyeri, Embu, Nakuru, Kiambu, Kajiado, Machakos, Murang'a, Kisii, Kirinyaga, Narok, Uasin Gishu, Meru, Laikipia, Kakamega, Makueni and Nyandarua.

Collectively, the counties generated Sh17.2 billion daily output in 2023, making them core wealth and job creators for Kenya’s economy.

They accounted for 66.1 percent of Kenya’s GDP, and their daily output is expected to have grown to Sh18 billion on the back of the country’s economic growth of 4.5 percent recorded last year.

Four of Kenya’s top five counties on GDP experienced scattered demonstrations.

Besides Nairobi, the other top countries are Kiambu (5.6 percent), Nakuru (5.3 percent), Mombasa (5.2 percent) and Machakos (3.4 percent).

The rest of the country remained largely quiet.

Police fired tear gas to disperse people on Thika Road and Kangemi estate, as well as in Kitengela, in Kajiado.

In Kamukunji, near the venue where the original Saba Saba protests were held, police battled groups of protesters who lit fires on the streets.

Earlier, hundreds of early-morning commuters and overnight travellers were stranded at police checkpoints, kilometres away from the city centre, with only a few vehicles allowed through.

Within the city, roads leading to key government installations - including the State House and Parliament - were barricaded with razor wire.

Recent demonstrations have turned violent, with reports of infiltration by "goons", who are accused of looting and attacking protesters.

At least 19 people were killed on June 25, and thousands of businesses were looted and destroyed in a day of nationwide protests that were being held in honour of those killed in last year's anti-tax protests.

On Monday, at least 10 people were reported dead.

Activists rally every year on July 7 to mark the date in 1990 when opponents of then-president Daniel Arap Moi launched a bid to transform Kenya into a multiparty democracy.

Business disruption across the city was evident on Monday as buildings hosting different companies shut their doors throughout the day, as some alerted their customers of their closure.

“Dear member, kindly note that due to the security environment today, 7th July, branches in Nairobi, except Kawi, remain closed. Additionally, all our offices will close at exactly midday. Normal business operations will resume on Tuesday, 8th July,” Stima Sacco informed its members.

Affected businesses cut across various sectors, but transport bore the heaviest brunt, with matatus blocked from crossing roadblocks, and long-haul trucks ferrying goods to neighbouring countries such as Uganda, Tanzania and South Sudan forced to halt operations.

Retail businesses also shut down in the aftermath of the blockade, as were service companies such as private hospitals, savings and credit cooperative societies (saccos) and banks.

Gladys Theuri, a boutique operator along Moi Avenue, Nairobi, told the Business Daily that she had moved her stock out of the shop last week for fear of looting.

But she had hoped to access the city centre and possibly trade.

“Today is just a lost day. It was not possible to open the shop or even access the town. I had opted to buy time and observe how the day would turn out before deciding whether to open, but it became apparent that business would not happen,” Ms Theuri said.

Nairobi’s dominance indicates inequality in the country’s economic development, which has partly been attributed to the previous centralised system of government, which guided the sharing of resources since independence.

The devolved system of government raised hopes of addressing the economic imbalance, but analysts say there is a need to offer incentives to attract private investors to the counties.

The demonstrations in the past three weeks follow last year’s so-called Gen Z protests, in which more than 60 people died over two months.

Those protests were triggered by government plans to introduce tax measures to raise an additional Sh345 billion for its budget, but quickly changed into demands for the ouster of President William Ruto, who is in his third year of a five-year term.

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